FDI Curbs In Multi-Brand Retail To Stay, Says Piyush Goyal

Commerce and Industry Minister Piyush Goyal has reaffirmed the central government’s stance against easing Foreign Direct Investment (FDI) regulations in the multi-brand retail sector.

Speaking at a session on India’s evolving manufacturing landscape, hosted by the Center for Strategic and International Studies in the United States, Goyal emphasised that such FDI restrictions are here to stay.

He stated unequivocally, "That’s a No-No. I want to make it loud and clear… America has suffered the consequences of Big Tech and large retailers and the interplay leading to the almost annihilation of Mom and Pop stores… You could afford it because your population is much smaller, there are alternate avenues for people to do jobs in, and you are satisfied that now the rest of the youngsters will probably be just sales or delivery boys or delivery girls. That’s a choice each country makes."

"India has nearly 100 million small mom and pop stores across the length and breadth of the country. In every village that you go to there will be 10 or 12 small stores selling different products and services. There will be a pharmacy in almost every corner. We believe that they play a very important role and we want them to be integrated with technology and e-commerce, or get a chance to withstand the business practices of e-commerce companies but we are not looking at changing the rules of e-commerce," added Goyal.

Retail accounts for over 10 per cent of India’s GDP, and while the government has liberalised many FDI policies over the years, it remains cautious about opening MBRT to FDI.

In September 2012, the government allowed up to 51 per cent FDI in MBRT under the Government approval route, but stringent conditions — such as a minimum investment of $100 million, with 50 per cent required to be directed to be invested in back-end infrastructure — have limited its appeal to foreign investors.

Although recent reforms have allowed 100 per cent FDI in food retailing, the broader MBRT sector continues to face restrictions. In contrast, most Asian countries, including China, Thailand, and Indonesia, as well as nations like Brazil, Argentina, and Chile, permit 100 per cent FDI in MBRT, positioning India as a more cautious player in opening its retail sector to foreign investment.